HB346 Alabama 2022 Session

Updated Apr 14, 2022

Summary

Primary Sponsor: Corley EllisRepresentative
Republican
Session: Regular Session 2022
Title: Employees' Retirement System, deadline for passing resolution for local employer participating in system to provide Tier I benefits to Tier II employees removed, Sec. 36-27-6.5 am'd.
Summary: HB346 removes the date deadline for local employers in Alabama's Employees' Retirement System to elect to provide Tier II employees the same retirement benefits as Tier I employees.
What This Bill Does
It allows participating local employers to elect, at any time, to provide Tier II members the same retirement benefits as Tier I members. The ERS Board can deny the election based on financial stability and past compliance, and the local entity may petition for reconsideration under the bill's process. If approved, the election is irrevocable and becomes effective at the start of the fiscal year after the ERS receives the resolution. Once in effect, Tier II members begin contributing 7.5% of earnable compensation (8.5% for firefighters, law enforcement officers, or correctional officers), and creditable service remains governed by the respective Tier's benefit rates.

Who It Affects
Local government employers participating in the Employees' Retirement System who may elect to provide Tier II members the same benefits as Tier I, subject to ERS Board review and potential denial.
Tier II plan members (employees) who would receive Tier I-level retirement benefits and begin contributing 7.5% of earnable compensation (8.5% for firefighters, law enforcement officers, or correctional officers) once the election becomes effective.

Key Provisions
Amends Section 36-27-6.5 to remove the date limitation on electing to provide Tier II members the same retirement benefits as Tier I.
Allows an election by resolution with ERS Board review; the Board may deny the election based on financial stability and historical compliance; local entities may petition for reconsideration (deadline referenced in the bill).
Election is irrevocable and takes effect at the beginning of the fiscal year after the ERS receives the resolution.
If Tier I contributions have not increased as required, the employer must develop a plan to gradually raise contributions before electing to provide Tier II the same benefits.
Tier II members begin contributing 7.5% of earnable compensation (8.5% for firefighters, law enforcement officers, or correctional officers) once the election becomes effective.
Creditable service from different Tier plans remains governed by the respective Tier's benefit rates; overall pension determinations continue to be based on the member's Tier at withdrawal.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.
Subjects: Employees' Retirement System